Government budget announcements regarding a number of changes to the superannuation system will fix issues that have been buried in the system for some time, according to a major accounting body.
Chartered Accountants Australia and New Zealand (CAANZ) superannuation leader Tony Negline said the changes to legacy pensions, residency rules for SMSF members and the removal of the $450 minimum super guarantee (SG) threshold were piecemeal but necessary improvements.
“We welcome the ability to dismantle some older-style legacy pensions that have been barnacles attached to our complicated superannuation system for many years,” Negline said.
“This will allow a small number of SMSF members to get out of products that outlived their usefulness more than 10 years ago.”
He added CAANZ welcomed the relaxing of residency rules for SMSFs when fund members have temporarily moved overseas for work or family reasons and the removal of the work test for people aged 67 to 74.
The removal of the $450 minimum SG threshold “will help Australians, particularly women, to be able to take better control of their financial future, including those who have accessed their super early”, he said.
This measure was also welcomed by CPA Australia external affairs general manager Dr Jane Rennie, who said the change gives low-income workers the opportunity to prepare for retirement.
“We welcome this measure, which will enable low-income earners to save for their retirement with every dollar they earn. This will improve economic security in retirement for women, but it does little to address the underlying issue of wage inequality, which drives the gender super gap.”
Rennie was also critical of the long-term effect of moves to increase the First Home Super Saver maximum voluntary contributions that can be withdrawn from $30,000 to $50,000.
“The existing scheme is poorly subscribed and this token increase is unlikely to help more Australians purchase their first home,” she said.
